Bürgel Wirtschaftsinformationen

During 2011, 30,294 companies became insolvent in Germany – a drop by 1,986 companies, i.e. 6.2 per cent, as compared to the previous year. “The economic situation had a positive impact as shown in the declining number of corporate insolvencies”, Dr. Norbert Sellin, the Managing Director of the credit agency Bürgel comments. According to the current survey “Corporate Insolvencies 2011” made by the company in Hamburg the number of cases of last year ranged at the level before the financial and economic crisis. Merely in 2007 less insolvency cases were noted. For the time being Bürgel does not see any signs of a negative trend in 2012: the company in Hamburg expects a drop of corporate insolvencies by one per cent in comparison with 2011.
Meanwhile the failure rate of young companies – enterprises actively trading in the market for less then two years – has become alarming. In comparison with the previous year 2010, an increase by 34.5 per cent was noted. The main cause that leads to the accumulation of insolvencies in this segment is that the company founders are forced to deal with manifold problems – in the initial phase mainly capital backing and financing difficulties, changes within the market and strategic incorrect decisions. All in all, about one fourth of all insolvent companies (26.6 per cent or 8,058 companies) were operating for less than two years in the market.
In an absolute comparison of 2011 each fourth insolvent company (6,786 cases) statistically comes from North Rhine-Westphalia. Bavaria (3,794) and Lower Saxony (3,148) also show high values. In relative terms, relating to the company density, 88 per 10,000 companies in the national average went bankrupt in 2011. The southern Federal States were effected the least – particularly Bavaria (64 insolvencies per 10,000 companies), followed by Baden- Wuerttemberg (65). With 138 cases per 10,000 companies Bremen records the worst results. But also in Saxony-Anhalt (112), Lower Saxony and Berlin (each 105) the insolvency rates are very distinctive.

In 15 of the 16 Federal States the number of company insolvencies declined. The only exception is North Rhine-Westphalia with an increase by 3.6 per cent as in comparison with 2010. The greatest drop by minus 15.4 per cent was noted in Saxony-Anhalt – closely followed by Baden-Wuerttemberg (minus 13.9 per cent) and Schleswig Holstein (minus 13.8 per cent).
Whilst the Bürgel survey categorises the young companies to be endangered, the number of companies active in the market for over 50 years dropped in comparison with the previous year. All in all, the “senior” companies only have a stake of 2.2 per cent in the corporate insolvency statistics. With regard to the company legal form, the trade professionals (share: 44 per cent) and private limited companies (34.8 per cent) are most affected by corporate insolvency. Based on the industry classification service providers in particular were forced to give up business. In this segment 15,305 companies are concerned. This value corresponds to more than half (50.5 per cent) of all insolvencies in 2011. The industrial sectors trade (share: 22.1 per cent of insolvencies) and construction industry (14.3 per cent) are also particularly affected by corporate insolvencies.

The causes for insolvency are firstly the absence of new orders or the cancellation or postponement of already placed orders. Second of all domino effects cause insolvent companies to drag other companies to insolvency. “Even healthy companies can end up in a precarious economic situation, as about 20 per cent of the insolvent companies are affected by domino effects”, Dr. Sellin explains. Thirdly the still restrictive credit approvals by the banks threaten company existences – especially of small and young enterprises. Fourthly, intra-company mistakes as well as lacking equity capital in conjunction with financial difficulties are responsible for an increased insolvency risk. Also a misinterpretation of the market or the lack of competitiveness can lead to company failure.

In the period January to September 2011 the number of private insolvencies in Germany has dropped by 1.5 per cent to 103,118 cases in comparison with the same period of the previous year. “The positive economic development and the improvements in the job market in particular have lead to a slight relaxation of the private insolvency situation”, Dr. Norbert Sellin, Managing Director of the credit information company Bürgel comments. However, especially in view of these positive signals the company in Hamburg expected less private insolvencies than actually recorded. This is the résumé of the current “Debt Barometer 1st to 3rd quarter of 2011” by Bürgel. For the total year of 2011 the credit information company assumes that the number of cases will fall below the number of the record year 2010 and forecasts 137,000 to 139,000 private insolvencies by the end of the year.
In the first nine months of the current year the following developments are particularly striking: firstly the number of insolvencies of young adults between 18 and 25 has increased by 3.2 per cent in comparison with the first three quarters of 2010 (in comparison with the first nine months of 2009 even by 38.8 per cent), in the age group of over 60-year-olds even by 8.6 per cent. Secondly, a detailed look at the sex according to age shows that in the age group of 18 to 25 year olds young women in particular have been facing problems with overindebtedness. In this age segment the figures have increased by 5.8 per cent in comparison with the first three quarters of 2010 – the number of men in this age group has merely increased by 0.1 per cent. Thirdly, private insolvencies in the age group 60-plus (plus 8.6 per cent of cases) increasingly concern women – showing a two-digit increase by 14 per cent in comparison with the year of 2010. Men of the same age group merely recorded an increase by 5.2 per cent. Fourthly, the number private insolvencies concerning women has increased by 0.5 per cent in the first three quarters of 2011 in comparison with the reference period 2010. The number of cases concerning men on the other hand has dropped by 2.9 per cent. The trend showing that more men (58 per cent) than women in Germany are forced to file for insolvency still applies to the first three quarters of 2011.

Taking the region in context the private insolvencies nationwide especially concerned the federal states of North Rhine-Westphalia (24,091 cases), Lower Saxony (13,019) and Bavaria (11,566) in the first three quarters. In a detailed analysis in relation to the population density the northern federal states come off the worst.

Most cases were recorded by Bremen with 227 insolvencies per 100,000 head of population, followed by Hamburg (174), Lower Saxony (164) and Schleswig-Holstein (163). The federal average amounts to 126 cases per 100,000 head of population. The least cases of private insolvency were noted by Bavaria and Baden-Wuerttemberg – 92 and 94 cases respectively per 100,000 head of population.
While twelve federal states show a declining number of cases in comparison with the same period in 2010, Hamburg shows the strongest and the only state with a two-digit increase by 11.7 per cent. But also in North-Rhine-Westphalia (plus 5.9 per cent), Berlin (plus 5.7 per cent) and Thuringia (plus 2.9 per cent) the debtor situation has gotten worse. Success, on the other hand, has been recorded by Saxony (minus 9.8 per cent), Baden-Wuerttemberg (minus 8.9 per cent) and Rhineland-Palatinate (minus 6.3 per cent).

The main causes for private insolvencies are unemployment, divorce, separation, illness, failed mortgaging or self-employment as well as an unsuitable consumption behavior in relation to the income situation. According to the survey conducted by Bürgel the largest risk class in regard to private overindebtedness is the youngest age segment.

In the first half year 2011 the number of private insolvencies in Germany minimally dropped by 0.9 per cent to 68,818 cases. “The number of private insolvencies is currently ranging at the nearly record high of the previous year”, outlines Dr. Norbert Sellin, Managing Director of the commercial report agency Bürgel in Hamburg, in the current Bürgel survey “Debt Barometer 1st half-year 2011”. In spite of decreasing unemployment figures, a reversal of trend is not in sight.

While employees in low-wage sectors and young people between 18 and 25 years had belonged to the high-risk group up to now, more and more older citizens have been experiencing financial distress since 2011. The share of debtors within the age group exceeding 60 years has increased by 8.9 per cent in comparison with the first half-year 2010.

The share of 18-25 year olds increased by 2.5 per cent in comparison with the first half-year of the previous year – compared with the reference period 2009 even by 51.3 per cent. Corresponding to these developments Bürgel expects a continuously high number of cases at the record high of 2010 and 138,000 to 140,000 private insolvencies Germany-wide.

In four federal states the case figures increased – in Hamburg even a two-digit growth by 15.5 per cent was recorded. But also in Thuringia (plus 7.4 per cent), North Rhine-Westphalia (plus 6.6 per cent) and Berlin (plus 5.5 per cent) the situation remains strained. The largest drop by minus 8.1 per cent was noted in Saxony, followed by Baden-Wuertemberg (minus 7.8 per cent) and Mecklenburg-Western-Pomerania (minus 5.1 per cent).

In almost all age groups private insolvencies seem to be a male phenomenon. 58.2 per cent of all private insolvencies in the first half-year 2011 concerned men. In the age group of 36 to 45 year-olds the share of men even amounts to 61.2 per cent.

Exception: In the group of young adults between 18 to 25 years of age female debtors with a share of 55.3 per cent dominate – especially due to the risk group of single mothers.

The main causes for private insolvencies still are unemployment, permanent low income, failed self-employment, separation and divorce. In addition, lacking financial experience, unsuitable consumption behavior and decline of income or low reserves contribute to citizens’ overindebtedness. Especially low-income households living from low wages or aid money, are quickly financially put under enormous pressure if costs rise.

In Germany the number of corporate insolvencies continued to decline in the first half-year of 2011. For this investigation period the current survey of the credit agency Bürgel in Hamburg shows a drop of corporate insolvencies by 10.9 per cent as in comparison with the reference half-year 2010. Thus, only 15,302 companies were forced to give up in the first half-year 2011. “The economic situation in Germany also has a positive impact on the corporate insolvency statistics”, says the managing director of Bürgel – Dr. Norbert Sellin. As – according to leading economic institutes – the economic boom is going to continue – albeit in a more moderate form – Bürgel expects a decline of insolvencies to 30,000 cases in the total year 2011. This corresponds to the level before the financial crisis. “If the economic upward trend in the current year continues, only the year of 2007 would show less corporate insolvencies in comparison with 2011 relative to the last decade”, adds Sellin. Only flaw: In the second quarter 2011 an increase by 6.1 per cent of companies forced to file for insolvency in comparison with the first quarter of the year was noted: While in the first three months only 7,423 companies closed down, a total of 7,879 companies was noted in the subsequent quarter. The further development of the corporate insolvencies, however, could be highly influenced by the European debt crisis which threatens to dampen the national economic upswing.

In a federal state comparison the absolute figures showing 15.302 corporate insolvencies in the first half-year mainly refer to North Rhine-Westphalia (3,197), Bavaria (1,870) and Lower Saxony (1,701). In the more telling relative consideration based on 10,000 companies it is shown that in Bavaria (32 per 10,000 companies) and in Baden-Wuerttemberg (35) the fewest companies were forced to shut down. While the national average shows 48 insolvencies per 10,000 companies, Bremen with 91 cases per 10,000 companies displays the gravest situation. Also in Saxony-Anhalt (84) as well as in Saxony (73) the situation is strained.

With one exception the number of corporate insolvencies in all federal states noted a downward trend in the first half-year: merely Bremen faced an increase by 5.7 per cent to 223 cases. The most significant drop by minus 18.5 per cent in contrast was observed in Baden-Wuerttemberg. But also in Bavaria and Saxony-Anhalt (by minus 17.2 per cent each) in particular as well as Berlin (minus 17.1) a drop by a two-digit value was noted.

The lion’s share of corporate insolvencies in the investigation period goes to trade profes- sionals and sole proprietorships with 44.5 per cent, followed by private limited companies with a share of 35.8 per cent of all insolvencies. For all analyzed legal forms the insolvency figures have dropped in comparison with the first half-year 2010 – for limited partner-ships with a private limited corporate as a general partner (GmbH & Co. KG) actually by minus 23 per cent, and even for the trade professionals and sole proprietorships by minus 2.4 per cent.

A fourth of the companies (25.7 per cent) which had to file for insolvency in the first half-year 2011 were only active in the market for a period of up to two years. This youngest age group which statistically often suffers from a lack of equity capital, however, shows a minimal improvement by minus 1.5 per cent in comparison with the first half-year 2010. “Many of the insolvent companies were established two years ago during the heyday of the financial crisis. The consequences of the difficult starting time are now becoming apparent”, comments the managing director of Bürgel Sellin.

Meanwhile the share of such companies in the insolvency statistics which have been active in the market for a period of over 50 years merely amounts to 2.5 per cent. In addition, the corporate insolvencies in this group dropped by 19.7 per cent. Similar good declines by 19.8 per cent were noted by the group active in the market for over 20 years.

The causes for company collapses are manifold: firstly the absence of new orders or the cancelation or postponement of already made orders have an impact. Secondly domino effects cause insolvent companies to drag other companies to insolvency. Thirdly the still restrictive credit approvals by the banks threaten company existences – especially of small and young enterprises. Fourthly intra-company mistakes and lacking equity capital are responsible for an increased insolvency risk. Even in good economic phases no company is immune against intra-company mistakes and a resulting failure to pay.

The number of private insolvencies in Germany fell slightly during the first quarter 2011 by 2 percent – to 34,022 cases in comparison with the same period of the previous year. “The values are stabilising at a high level,” is the resumée by Dr. Norbert Sellin, Managing Director of the Hamburg financial information agency Bürgel. However, according to the current Bürgel survey “Debt Barometer 1^st Quarter 2011” one must regard the number of private insolvencies independently of the economic boom. With reference to the credit situation of the consumers, unemployment figures and a rising number of employees in low-wage sectors, Bürgel expect between 135,000 and 140,000 private insolvencies during the current year.

In the regional distribution the private insolvencies are concentrated in the first quarter 2011 in particular on North Rhine-Westphalia with 7,639 cases, Lower Saxony (4,420), Bavaria (3,751) and Baden-Wuerttemberg (3,443). In relative values, based on the population figures, there is predominantly a north-south incline: with 30 cases per 100,000 head of population Bavaria records the lowest number of private insolvencies during the survey period, followed by Baden-Wuerttemberg (32) and Thuringia (35). Whereas the federal average ranks at 42 private insolvencies per 100,000 head of population, Bremen brings up the rear with far more than double as many cases (87). Similar high values are registered in Hamburg with 58 insolvencies per 100,000 inhabitants, Lower Saxony and Schleswig-Holstein (each 56) and the Saarland (53).

During the 1st quarter 2011 Hamburg had to cope with the strongest increase in private insolvencies (plus 12.6 percent) throughout the Federal Republic in comparison with the reference period of last year. However, the figures also increased in Thuringia (plus 8 percent), Bremen (plus 5.1 percent) and in Schleswig-Holstein and North Rhine-Westphalia (each plus 3.3 percent). On the other hand Hesse can claim the strongest decline for itself with 7 percent less cases, followed by Bavaria (minus 6.9 percent) and Baden- Wuerttemberg (minus 6.8 percent).

Increasingly badly hit by over-indebtedness are firstly the 18- to 25-year-olds, although they hold the lowest share of 6.5 percent of the age-related insolvency statistics. Admittedly, in the case figures of these young adults during the 1^st quarter 2011 a decline by 1.7 percent can be observed in comparison with the same period of the previous year. But in comparison with the reference quarter of 2009, 66 percent more of these young citizens slipped into the debt trap.

Secondly, most recently private insolvencies are affecting more and more people from 60 years onwards. According to the Bürgel survey, the share of this age group in the insolvency statistics rose again for the first time for five years – by 6.4 percent in comparison with the first quarter 2010.

The largest share of the statistics according to age groups is held by the group of 46- to 60-year-olds with 32.1 percent. The 36- to 45-year-olds can claim a share of 30.1 percent. The rate among the 26- to 35-year-old ranks at 23.8 percent and among the over-sixties at 7.5 percent.

58.3 percent of all private insolvencies can be allocated to men. This trend is apparent through all age-groups. With the 36- to 45-year-olds the figure even reaches 61.6 percent. Only in the youngest segment of 18- to 25-year-olds do the women dominate – with a share of 55.1 percent and single-mothers make up the largest risk group. The “female” share in this age segment has risen in comparison with the first quarters of 2011 and 2010: Last year the rate was a lower 52.8 percent.

The main reasons behind private insolvencies are still unemployment, permanently low income, unsuccessful self-employment, separation and divorce. Besides these, the lack of experience in handling finances and banks, inappropriate consumer behaviour and a drop in income pay an essential contribution towards the fact that so many people are affected by over-indebtedness. It is especially the weak-income households that live off low wages or financial aid, have no savings potential during rising inflation.

During the first quarter of 2011 the German economy has again recorded falling figures in corporate insolvencies with 7,424 cases in all. In comparison with the reference quarter in 2010, 8.7 percent less companies filed for bankruptcy. Correspondingly, the Hamburg financial information agency Bürgel expects up to 30,000 corporate bankruptcies for 2011 – a level that existed before the economic crisis.

“The economy in Germany has been continually improving over the past few months,” says Bürgel Managing Director Dr. Norbert Sellin. This is apparent from the positive values both in the decreasing corporate insolvency figures and in the domestic demand. “In particular the distinct rise in German exports of plus four percent in comparison with the first quarter 2010 have a positive effect on the local economy,” Sellin explains.

The possible insolvency of some European states and the effect this has on the Euro present a great economic risk. In addition, the increasing raw material prices could cause the economic engine to sputter.

The corporate insolvencies during the first quarter 2011 are distributed most strongly among the federal states North Rhine-Westphalia with 1,527 bankruptcies, Bavaria (911) and Lower Saxony (821). However, regarded relatively, the rates fluctuate distinctly: Bavaria with 16 corporate insolvencies per 10,000 companies and Baden-Wuerttemberg (18) report the lowest figures, followed by Hesse (21 bankruptcies) and Rhineland-Palatinate (22). Although the federal average lies at 23 cases per 10,000 companies, Bremen comes off worst with 50 insolvencies. Similar high values are recorded in Saxony-Anhalt (42) and Saxony (34).

However, the case figures are on the decline in 13 federal states. The best results of the first quarter were from Saxony-Anhalt with a decrease by 17.1 percent. Also considerably less insolvency cases were recorded by Hesse (minus 16.4 percent), Berlin (minus 16.0 percent) and Rhineland-Palatinate (minus 14.5 percent). Only the Saarland with a clear plus of 31,9 percent, Brandenburg (plus 2.1 percent) and Bremen (with a slight increase by 0.9 percent) are having to cope with rising figures in corporate insolvencies.

Throughout the Federal Republic, 3,400 businessmen and sole proprietorships constitute the greatest share of corporate insolvencies, i.e. 45.8 percent during the survey period. The limited liability companies (GmbHs) also come off badly during this period with a share of 36.3 percent. In comparison with the first quarter 2010 the insolvency figures are, however, on the decline in all legal forms – headed by the “GmbH & Co. KG” with minus 20.9 percent.

With regard to the age of the companies, a quarter (25.3 percent) of the corporate bankrupts during the first quarter 2011 had not been on the market for more than two years. This is linked with the fact that young companies are often lacking equity capital needed for surviving crises. Also, access to the capital market is more difficult and cost-intensive for them. However, the share of the young companies in comparison with the reference quarter 2010 has fallen by 11.3 percent.

With 24.5 percent the second highest share of all insolvencies can be found among companies that have been active on the market for between 11 and 20 years. The least endangered, on the other hand, are companies that have been in existence for more than 50 years. Their share of the bankruptcies by age amounts to 2.7 percent only.

The reasons for corporate insolvencies are diverse: they are firstly influenced by a lack of new orders or the cancellation or postponement of already placed orders. Secondly domino effects cause insolvent companies to drag other companies with them into insolvency. Thirdly, the still restrictive loan allocation by the banks constitutes a threat to corporate existence – especially in the case of small and young companies. Fourthly, internal errors or the lack of equity capital are responsible for an increase in the insolvency risk factor.

In 2010 the number of private insolvencies reached a new climax. With 138,110 cases in Germany (plus 6.4 percent, i.e. 8,412 more cases compared with 2009) the bankruptcy statistics even exceeded the previous record year 2007. Particularly younger citizens are affected. It is true that the statistical total owed by young adults lies below the federal average, but on the other hand the number of creditors is higher than with the average bankrupt. These are the results of the current Debt Barometer 2010 compiled by the Hamburg financial information agency Bürgel. According to this, in comparison with 2009, the 18- to 25-year-olds have experienced the highest increase in insolvency cases of all age-groups, i.e. 27 percent. The average debt amount in 2010 was just below 33,000 EUR for federal citizens in private insolvency. But the outlook for 2011 continues to be subdued: “We can expect case figures on the same high level as in 2010,” was the résumé by Bürgel Managing Director, Dr. Norbert Sellin.

Regarded in absolute figures, the most densely populated federal state, North Rhine-Westphalia, is the worst affected with 30,228 cases of private insolvency. In relation to the number of population, however, a differentiated picture is conveyed with a distinct north-south decline. Here, Bremen leads the insolvency ranking with 307 cases per 100,000 head of population, followed by Lower Saxony (230), Schleswig-Holstein (225) and the Saarland (212). On the other hand, the lowest values are recorded in the southern federal states: Bavaria with 125 private insolvencies per 100,000 head of population, Baden-Wuerttemberg (136) and Thuringia (137).

Even in the percentage changes compared with 2009, great differences are apparent. Only 3 of the 16 federal states report a decline: Brandenburg with 4.4 percent less cases, followed by Sachsen-Anhalt (minus 1.2 percent) and the Saarland (minus 0.9 percent). On the other hand, there is a double figure rise to be coped with in Thuringia (22.2 percent), North Rhine-Westphalia (plus 12.3 percent) and Berlin (plus 11.2 percent).

The strongest percentage decreases on an urban and district level were recorded in Weißenburg-Gunzenhausen (minus 34.6 percent), Ansbach (minus 33.3 percent) and in the Nuremberg rural district (minus 32.8 percent).

The strongest rise is reported by the district of Sömmerda in Thuringia with 43.4 percent more private insolvencies, followed by Bottrop (plus 43.2 percent) and the Kyffhäuser District (plus 39 percent).

32.1 percent of the insolvency cases in 2010 are allocated to the 46- to 60-year-olds. In the case of the 36- to 45-year-olds, the share amounts to 30.9 percent. Taking a look at the “Best Aged” from 60 upwards, the figures are considerably lower, with 6.9 percent; com- pared with 2009 their bankruptcy tendency has even decreased by 10 percent. The young adults aged from 18 to 25 years show an insolvency share of 6.4 percent of the overall statistics which is the lowest value of all. Besides the double-figure increase in the number of cases in this segment compared with 2009 (plus 27 percent), the rate reported for the 26- to 35-year-olds has also risen by 10.7 percent.

Men are to blame for 58. percent of all private insolvencies – a trend that is apparent throughout almost all age groups. The gender imbalance is particularly noticeable among the over-60-year-olds with a male proportion of 61.5 percent. The only exception is provided by the 18- to 25 year-olds. Here, the female share is higher (53.9 percent). The strongest risk group among these young adults is the category single mothers. Where families are affected by indebtedness, it tends, on the contrary, to be the men who most frequently help seek from advice bureaus.

The main causes of private insolvency are unemployment, permanently low income, failed self-employment, separation and divorce. In addition, statistics prove that a lack of experience in dealing with finances and banks, inappropriate consumer behaviour and decreasing income often lead the way into the debt trap.

In 2010 32,280 companies in Germany announced their insolvency. According to the latest survey by the financial information agency Bürgel this means 4.4 percent or 1,482 corporate insolvencies less than during the previous year. “The current positive development is mainly due to the improved domestic economic activity, the rise in export rates and the recovery of the credit market“ the Managing Director of Bürgel, Dr. Norbert Sellin, explained. Whereas the financial crisis will still play a significant role in the weak first quarter, the latest economic forecasts, for example those of the German Institute for economic research (German DIW Berlin), predict financial growth for the current year. “This will become apparent in a further decline in the number of corporate insolvencies,“ Sellin outlined.

Whereas in the absolute figures of the individual federal states, just under 20 percent (6,548) of all national corporate bankruptcies were incurred in North Rhine-Westphalia alone, Hamburg with 55 insolvencies per 10,000 companies shows the lowest relative value, followed by Bavaria (72 per 10,000 companies) and Baden-Wuerttemberg (75 per 10,000). On the other hand, Bremen presents the highest value with 142 insolvencies per 10,000 companies.

Also in Saxony-Anhalt (132) and Schleswig-Holstein (120) the figures continue to occupy the highest places on the list. The federal average lies at 90 bankruptcies per 10,000 companies.

In the percentage changes in comparison with 2009, the figures fell in 14 of 16 federal states, in particular in the Saarland with 14.1 percent less corporate bankruptcies. Also Thuringia (minus 10 percent) and North Rhine-Westphalia (minus 8.8 percent) have come out well. On the other hand, Berlin has recorded a strong increase by 8 percent. In Rhineland-Palatinate the number of corporate insolvencies in 2010 has increased by 2.2 percent.

Worst hit among the corporate insolvencies last year were 13,266 commercial enterprises and sole proprietorships with a share of 41.1 percent in the corporate insolvency community. Badly affected are also 11,263 limited liability companies with a share of 34.9 percent and a rise by 8.6 percent in comparison with the previous year.

Also companies that have existed on the market for up to two years are filing more and more frequently for bankruptcy than older companies: In comparison with the previous year the statistics for 2010 have risen in the category of these young companies by 7.2 percent whereas the figures for all other age groups are on the decline. According to Bürgel, the reasons are more restrictive bank lending, lower resources and a lack of experience on the part of newcomers to the market. Correspondingly, 18.6 percent of the insolvent companies have not been present on the market for more than two years. Currently, companies that have been operating for more than 50 years have the best chances of survival and with 3.2 percent hold the lowest share of the insolvency statistics.

Reasons that can still lead to the opening of bankruptcy proceedings are firstly a lack of new orders or the cancellation or postponement of orders already received. Secondly, domino effects ensure that insolvent companies drag other companies with them into insolvency. Thirdly, restrictive bank lending is still a threat to corporate subsistence – especially in the case of small and young companies. Fourthly, company-internal mistakes and the lack of equity are responsible for an increased insolvency risk.

For 2011 Bürgel forecasts a continuation of the positive trend and expects 30,000 to 31,000 corporate bankruptcies in Germany. One instability factor remains: the insolvency of individual european states could affect the positive development of the economy.

During the first half-year 2010, the number of private insolvencies is at a high level in Germany with 69,417 cases according to the Bürgel Debt Barometer. In comparison with the same period of the previous year (1st half-year 2009: 61,517) 12.84 percent more persons had to file for private insolvency. “The current development is threatening to exceed the record year 2007 that registered 137,000 cases,“ Dr. Norbert Sellin, Managing Director of the financial information company Bürgel warms. Accordingly the Hamburg company reckons with 140,000 private insolvencies in its overall forecast for the year 2010.

The greatest number of private insolvencies as seen in absolute figures was registered by the most densely populated federal state, North Rhine-Westphalia with 14,999 cases. On the other hand the relative values are more meaningful as they also take the population figures into consideration: according to these in particular the northern federal states are more severely affected – especially Bremen with 167 private insolvencies per 100,000 head of population. Whereas the federal average lies at 85 private insolvencies per 100,000 head of population, Lower Saxony with 115 private bankruptcies per 100,000 head of population and Schleswig-Holstein (114) are the main losers. In contrast to this, Bavaria (63 per 100,000 head of population), Baden-Wurttemberg and Thuringia (each with 68) get away with comparatively moderate values.

All federal states are affected by an increase in the number of private insolvencies, seven of these even with a two-figure increase. The case figures rose most drastically in Thuringia (plus 48.98 percent), North Rhine-Westphalia (plus 25.97 percent) and Berlin (plus 21.65 percent). The increase rate was weakest in Saxony (plus 2.87 percent), Saxony-Anhalt (plus 3.12 percent) and the Saarland (plus 3.24 percent).

58.94 percent of all private insolvencies during the first half-year 2010 affected men. This “male” trend can be commonly found in almost all age-groups. Only with the 18- to 25-year-old German citizens is the female share stronger with 53.41 percent. On the other hand the group of 36- to 45-year-olds show the lowest female proportion with 38.4 percent.

In the youngest age-group of 18- to 25-year-olds the number of insolvency cases during the first half-year 2010 in comparison with the reference period of the previous year rose by 47.89 percent. Here the 26- to 35-year-olds also record a two-figure plus of 18.47 percent. The only decline in figures was with the over-sixties. Here the case figures fell by 3.32 percent.

Reasons for private insolvencies are usually unemployment, changes in the family situation (separation or divorce) and inappropriate consumer behaviour in relation to the income. In addition also illnesses, accidents, addiction, and even failures with property financing or self-employment as well as permanently low incomes lead the way into the debt trap. According to Bürgel private indebtedness particularly affects younger people who are less experienced in financial matters and who usually have lower financial flexibility. The current trend is an increase in the number of private bankruptcies: “The overall outlook for the year 2010 continues to be negative,” Sellin sums up.

During the first half-year 2010 17,178 companies filed for bankruptcy. This means that the number of insolvency cases in comparison with the same period of the previous year (16,441) has risen by 4.48 percent. However, the insolvency statistics for the current year look like being more moderate than originally feared: In its current survey for 2010, the Hamburg financial information agency BÜRGEL reckons with a slight rise by three to four percent and forecasts up to 35,000 cases. “Nevertheless even more companies are having to instigate insolvency proceedings than at the time of the financial crisis. An economic balance has not yet been reached,” BÜRGEL’s Managing Director, Dr. Norbert Sellin, emphasises.

Heading the list of corporate insolvencies during the first half-year in respect of the federal states is North Rhine-Westphalia (3,305 cases) when regarding the absolute figures. The following positions are occupied by Bavaria with 2,258 bankruptcies, Baden-Wurttemberg (1,863) and Lower Saxony (1,781).

If one presents the statistics in relation to the company density in each of the federal states, then the least number of corporate insolvencies is apparent in Hamburg with 29 cases per 10,000 companies. Also in Bavaria (38), Baden-Wurttemberg, the Saarland and Thuringia (40 cases each), the numbers of cases are comparatively low. These states lie below the federal average of 46 insolvencies per 10,000 companies. The worst results are recorded – by far – in Bremen with 80 insolvencies per 10,000 companies. But the survey has also come up with increased figures in Saxony-Anhalt (67 cases per 10,000 companies), Schleswig-Holstein (62) and in Berlin (59).

The strongest increase in insolvency figures by 25.3 percent to 1,316 cases was recorded during the first half-year 2010 in Hesse. But also in Bavaria (plus 22.66 percent; 1st half-year 2010: 2,258) and Lower Saxony (plus 21.65 percent; 1st half-year 2010: 1,781) the numbers of bankruptcies are on the increase. In the meantime the insolvency statistics are showing a downward trend in the Saarland with minus 29.79 percent – likewise in North Rhine-Westphalia (minus 22.36 percent), Thuringia (minus 17.99 percent) and Hamburg (minus 8.20 percent).

The worst hit by corporate insolvencies during the first half-year are 6,977 commercial enterprises. This corresponds to a share of 41 percent of all corporate insolvencies registered during the survey period. 35 percent of all bankruptcies affect the legal form GmbH. Here 5,982 companies applied for creditor protection during the survey period. With regard to the age of the companies concerned, it is particularly companies that have only been active on the market for one to two years, that have had to noticeably shed their feathers – with a share of 18 percent of the insolvency figures. On the other hand the companies that came off the most lightly were those who have already been in existence for more than 50 years.

Even if the number of cases is lower than expected and the underlying economic conditions have turned out to be quite favourable – keyword: strong increase in exports (Federal Statistical Office) and a forecast economic growth of 1.4 percent (IWF) – the effects of the development during the first half-year for the German economy should not be underestimated. The four main reasons for the continued large numbers of corporate insolvencies are, firstly, the absence of new or rather the cancellation or postponement of already placed orders. In the second instance, domino effects cause insolvent companies to drag other companies along with them into bankruptcy.

Thirdly, the restrictive bank lending policy is jointly responsible for the insolvency trend at a continued high level. Fourthly, many companies have also made internal errors: in their management, through lack of controlling and the poor structural adjustment as well as outdated technologies.

Rising consumer insolvency figures in 15 of the 16 federal states: with 34,710 cases, private bankruptcies are on the increase during the first quarter 2010. In comparison with the same period of the previous year they have risen by just under 14 percent. This was the result of the current survey carried out by the financial information agency Bürgel. This Hamburg company has corrected its annual forecast upwards from 137,000 to 140,000 private bankruptcy declarations. Should this development materialise, in figures it would even outstrip the record year 2007. In particular young citizens of the Federal Republic are affected by private insolvencies. In the age-group of 18- to 25-year-olds alone, the figures soar up by 72 percent during the survey period.
In a comparison of the absolute figures of the federal states, North Rhine-Westphalia comes off worst during the first quarter with 7,395 private bankruptcies. Regarded in figures, every fifth bankruptcy declaration (21 percent) throughout the Federal Republic is submitted there. Meanwhile, in a comparison of relative figures (83 insolvencies per 100,000 head of population) Bremen is the high flyer. However, Bürgel also verifies high values for Lower Saxony (58 insolvencies per 100,000 head of population), the Saarland (55), Schleswig-Holstein (54) and Hamburg (52). The federal average lies around 42 private insolvencies per 100,000 head of population. The best results are in Bavaria and Thuringia (with 32 cases per 100,000 head of population), followed by Baden-Wurttemberg (34).

The strongest growth in private bankruptcies during the first quarter 2010 in comparison with the reference period of the previous year is recorded in Thuringia: plus 46.54 percent. Also Berlin (plus 27.34 percent), North Rhine-Westphalia (plus 26.04 percent), the Saarland (plus 23,85 percent) and Mecklenburg-Vorpommern (plus 20.65 percent) have increased their number of private insolvencies by more than a fifth. The only decline in any one federal state: in Schleswig-Holstein the figures have decreased by just below three percent to 1,525 cases.

During the first quarter 59 percent of all private insolvencies, 20,497 cases in all, fall upon men. Only in the youngest group of 18- to 25-year-olds is the female gender in the lead with a share of just below 53 percent. Bürgel’s statistics show the greatest gap between the sexes in the group of 36- 45-year-olds. Here, the male share amounts to 62 percent.

In the younger age-group of 18- to 25-year-olds the share of private bankrupts rises by 72 percent to 2,235 cases. Even more dramatic (plus 84.27 percent) is the rise within the male sector: here the figure rises to 1,054 cases. Also the age-group of 26- to 36-year-olds is grappling with just below 22 percent more private insolvencies during the survey period.

Altogether the uneven distribution of private debts is especially connected with an unfavourable ratio of expenses to income in the case of younger people. Here, investments in homes and starting families and partly also high consumer demands have to be covered by comparatively low earnings. In addition, in particular the younger citizens have less financial reserves available to counteract payment bottlenecks. “In view of the current figures, the outlook for 2010 is negative,” Bürgel managing director, Dr. Norbert Sellin, sums up.

Economic insecurity, rising figures of low-income earners, and unemployment at a high level as well as increasing over-indebtedness have caused Bürgel to adjust its annual forecast upwards to as many as 140,000 private insolvencies.

In 2009 130,698 federal citizens filed for private insolvency. This corresponds to a rise by 8.65 percent in comparison with the previous year (2008: 120.289). In particular younger people are increasing hit by the current wave of bankruptcies and are at risk of poverty. This was the result of the present survey “Debt Barometer 2009” by the Hamburg financial information agency Bürgel.

It is indeed true that the number of cases of private insolvencies has decreased over the survey period 2009 towards the end of the year: during the fourth quarter of 2009 a total of 33,834 consumer insolvencies were registered – 4.28 percent less than during the previous quarter (3rd quarter 2009: 35,347). However, for 2010 for various reasons Bürgel expects a negative development in consumer insolvencies to more than 137,000 cases.

Top of the list for 2009 in the absolute figures is North Rhine-Westphalia with 26,918 private insolvencies. Just below 20 percent of all cases occur in this federal state. In 2nd place is Lower Saxony with 17,605 insolvencies and in 3rd place Bavaria with 14,860 bankruptcies.

In relation to the number of inhabitants per federal state, Bremen leads with 284 insolvencies per 100,000 head of population, followed by Lower Saxony (222) and Schleswig-Holstein (219). On a federal average 159 private persons per 100,000 head of population had to file to the bankruptcy court. The least number of private insolvencies during the survey period 2009 is registered in Thuringia with 112 cases per 100,000 inhabitants, Bavaria (119) and Baden-Württemberg (129).

In comparison with the previous year the number of cases in 2009 only decreased in three federal states. Here Thuringia comes out best with minus 23.1 percent (2009: 2,530 cases). The figures are also on the decline in North Rhine-Westphalia with minus 5.67 percent (2009: 26.918) and in Berlin with minus 4.26 percent (2009: 5,365). In the meantime the Saarland, with an alarming plus of 57.78 percent more private insolvencies, registers the strongest increase to 2,190 cases. The case figures also soared up in Brandenburg (plus 34.71 percent; 2009: 5,286 cases) and Hamburg (plus 23.13 percent; 2009: 3,572 cases).

Altogether during the previous year 58.59 percent of all private bankruptcies can be allocated to men (share: 76,571 cases). The Bürgel survey records the highest number of private insolvencies independent of gender among the 36- to 45-year-olds (share: 31.9 percent; 41,695 bankruptcies), closely followed by the 46- to 60-year-olds (share: 31.75 percent; 41,499 cases). The group of the 18- to 25-year-olds appears to be problematic. Here 7,038 private insolvencies occurred during the past year – 34.49 percent more cases than in 2008.

Private bankruptcies particularly hit younger groups because their investments in homes and families have to be mastered from a comparatively low income. In addition, statistically the younger consumers have less capital that could help them overcome a crisis caused by financial bottlenecks. Apart from the classical causes of indebtedness (unemployment, separation or the death of a partner, illness or the failure of self-employment), particularly the younger citizens suffer from the results of failed mortgaging and a consumer behaviour that is inappropriate to the income situation. In addition, the rising figures in corporate insolvencies lead to a higher risk of becoming unemployed.

“With this background the outlook for 2010 continues to be negative,” is the forecast by Bürgel Managing Director, Dr. Norbert Sellin who maintains that during the current year more than 137,000 private insolvencies are possible. If this was the case, the figures would even surpass the situation in 2007. This trend is also underlined by a current survey by the DIW, the German Institute for Economic Research. According to this about 11.5 million people – especially young adults – were already considered in 2008 as standing a high risk of poverty.

In 2009 the number of corporate insolvencies in Germany increased once again: during the year 33,762 companies declared their insolvency. This is 11.08 percent higher than during the previous year and confirms the figure forecast by the financial information agency BÜRGEL who one year ago estimated 34,000 bankruptcies in 2009. Altogether over the last ten years 340,921 corporate insolvencies were registered. According to their current survey “Corporate Insolvencies 2009” the Hamburg company forecasts a further rise to between 37,000 and 40,000 cases for 2010.
During the survey period from January to December 2009, the most corporate insolvencies, when regarded in absolute figures, occurred in North Rhine-Westphalia (7,178), followed by Bavaria (4,267) and Baden-Württemberg and Lower Saxony (3,423).

In a relative comparison the largest number of insolvent companies comes from Bremen – 146 per 10,000 companies. Also in Saxony-Anhalt (130) and Schleswig-Holstein (120) the figures are among the highest in the country. The lowest number is reported in Hamburg with 58 cases, followed by Bavaria (72) and Baden-Württemberg (78). The average throughout the Federal Republic lies at around 91 insolvencies per 10,000 companies.

In an analysis of the Top 30 cities, Berlin recorded the most corporate insolvencies in 2009: 1,507 cases. This corresponds to a share of 4.46 percent of all corporate insolvencies in Germany. Places two and three were occupied by Hamburg with 992 and Munich with 559 cases. The lowest number of corporate insolvencies occurred in Kiel (91 cases), Chemnitz (176) and Brunswick (116).

In a comparison of the year 2009 with the previous year, the strongest decrease in the number of corporate insolvencies was in Berlin with minus 11.35 percent. Whereas in 2008 1,700 companies in the city had to apply for creditor protection, the following year it was still 1,507 companies. Also on the decline are the insolvency figures in North Rhine-Westphalia with minus 6.44 percent (2008: 7,672 cases; 2009: 1,178). The worst hit by the insolvency trend was Bremen with a plus of 32.53 percent. There 387 companies instituted bankruptcy proceedings during the past year whereas 292 companies had to give up in 2008. Below Bremen in the ranking are Baden-Württemberg with an increase by 32.32 percent (2008: 2,735 cases; 2009: 3,619) and Hesse (plus 29.95 percent).

It is striking from the companies’ structure that 16.55 percent of the companies that became insolvent over the last twelve months had not been active on the market for more than two years.
According to Bürgel the insolvency risk only declines again in the case of old-established companies that have existed on the market for 50 years or longer. With 3.22 percent their share of the insolvency statistics for 2009 is the lowest.

The category of companies that were involved most frequently in insolvency proceedings in 2009 were trades with a proportion of 41.42 percent (13,924 cases), followed by GmbHs (limited liability companies) (30.72 percent; 10,370 cases) and the legal forms GmbH & Co. KG (limited partnerships with a limited liability company as general partner) or GbRs (private partnerships) (9.7 percent; 3,131 cases).
The main reasons for the rise in insolvency figures are still the underlying economic conditions and the lack of liquidity due to decreases in the number of orders received and the restrictive allocation of loans.

The financial and economic crisis is increasingly putting companies under pressure. In 2008 the number of corporate insolvencies already rose after a falling tendency since 2003. According to an analysis carried out by the financial information agency Bürgel, during the first quarter of 2009 a total of 6,765 companies filed for bankruptcy. In comparison with the 4th quarter of last year this means a rise by 11.3 percent.

With 1,335 cases the most company insolvencies could be observed in North Rhine-Westphalia during 1st quarter 2009, followed by Bavaria (794) and Lower Saxony (746). In relationship to the total number of companies per federal state, companies from Bremen went bankrupt most frequently, i.e. 32 per 10,000 registered companies, followed by Saxony-Anhalt (29) and Schleswig-Holstein (28). The least number of corporate insolvencies were reported from Hamburg and Bavaria, each with 13 cases per 10,000 companies. These were the results of the latest survey “Corporate Insolvencies 1st Quarter 2009“ carried out by Bürgel Wirtschaftsinformationen GmbH & Co. KG Hamburg.
The strongest increase in insolvencies was recorded in Saxony-Anhalt (+36.7 percent), Hesse (+28.6 percent) and Baden-Württemberg (+28.6 percent).
17.3 percent of all companies that went bankrupt during the 1st quarter 2009 were no more than 2 years old. But even companies more than 10-year-old are not protected against insolvency. In fact 26.6 percent of the 6,765 insolvent companies during 1st quarter 2009 had been on the market for a period of between 11 and 20 years.
“Many companies are simply lacking customers, their existing orders have been concluded. Further problems for companies are payment backlogs or failure of payment on the part of customers as well as the lack of equity capital. Because of this, over the next few months there will be an increasing danger of companies lacking in liquidity,” says Dr. Sellin, executive manager of the financial information agency Bürgel.
According to Bürgel’s estimation, in 2009 there will be a rise in corporate insolvencies to 34,000 cases. With this economic situation in mind, the experts from Bürgel advise a consistent examination of customers’ economic situation and credit-worthiness in order to secure one’s own corporate liquidity.